Have any homeowners stopped escrow payments on their mortgage?

[PauletteGoddard]

I'm considering ending the escrow payments on our mortgage, and would like to read experiences of mortgagees who moved to pay insurance and real estate taxes out of their own accounts.

I believe every mortgage servicer has its own rules about escrow payments. I haven't yet called our mortgagor to determine eligibility. We have held a conventional mortgage for over two years and have a loan-to-value ratio of 30%. How was your loan-to-value, percent equity, percent principal paid on the domicile when you ended payments? Did any mortgage servicer/financial institution deny you the opportunity to end escrow payments for reasons other than loan-to-value and equity requirements?

[klarose]

I am currently having a lot of trouble with the bank and escrow payments. I would love to hear other people's opinion on this as well.

[riverwed070707]

We don't escrow either of our mortgages (main property or rental). Both had different lenders originally that required escrow. When we refied them to 15 year loans, we specifically sought out companies who would not require us to have escrow. I prefer the lower monthly payment and it allows us to balance paying our policies and taxes during times when we know our income is going to be higher. Some people like the balanced payment, I like the flexibility of deciding how my money is spent and saved through the year.

[TBH]

I wish I could get rid of escrow! Wells Fargo consistently miscalculates, and we always have a big overage to make up at the end of the year. But I don't think Wells Fargo allows it.

[kork13]

I've had my mortgage for a little over a year, and already decided I'm not a fan of escrow... The loan servicer significantly over-estimated my escrow requirements, and now it sits with dead cash 50% above my annual taxes & insurance costs. I'd rather manage it myself -- it's just 2 annual payments (one for property tax, one for homeowners insurance), so there's no reason it would be unmanageable for me. Plus, as I put the money into savings over the course of the year, I'm able to earn interest (admittedly a pittance right now) on the money.

I know that I am allowed to request that I cease escrow (there's a clause in my mortgage documents that allows it), but I don't know yet what the requirements will be. Right now I'm at about 33% equity, so hopefully over the next 6 months or so I'll be able to call in, get the details, and make escrow go away. I trust myself far more than a faceless mortgage servicing company.

[Jerry91]

I do not think it is so easy to stop your escrow payments. If you stop the payments, you may end up with a huge overage by the year end. This might be difficult for you to pay off.

[snafu]

Does your municipality have a Tax Instalment Payment Plan [TIPP] that supports 12 automatic withdraw payments for annual property taxes without fees to owners? Do they required payment in lump sum by a specific date? Do they discount pre payment of tax?

How much are you paying via escrow for house insurance for how much coverage with how much deductible and including contents, flood, hurricane, or whatever is appropriate in your region? There is a lot of details about coverage and quotes on-line. Does your insurer offer a discount for multi policies?

Does your service provider charge you for penalties for their late payments?

[creditcardfree]

I stopped escrow payments when we had Bank of America. It was a conventional loan. We had to have a loan balance to home value of more than 20%. In our case, it was a simple as requesting the change. I was very happy to self escrow...and I simply set up reminders in my calendar to pay taxes twice a year and the insurance once a year. I also set my escrow money aside in a separate savings account monthly.

I know some types of loans won't let you cancel escrow accounts, VA loans specifically. Also, some servicers will require an appraisal to determine home value. If your appraisal is short, you will be offered to pay down the mortgage to the required amount to cancel the escrow. The appraisal cost is the homeowner's responsibility.

Just inquire and you'll know what your options are!

[BMEPhDinCO]

A clause in my mortgage stated that part of the "low" (haha) rate was because I had escrow. It would cost me quite a bit of money to get rid of it now. I didn't know this until I called. So I echo others..

Call and find out your situation.

[bennkar]

Years ago I originally had escrow, and when I refinanced with a local credit union they were not interested in doing escrow, insisting I pay everything instead. Which I was very happy to do. I suppose this isn't for everyone however. Anyway.... if you want to get rid of it, check with local credit unions about refinancing and see how they handle it.